Expert on postponement of sanctions against NIS: "First they'll postpone them once, twice, and finally..."

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Today, President Aleksandar Vucic announced that Serbia was given another 30 days before the US sanctions against NIS (Petroleum Industry of Serbia) would come into effect.

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We spoke with energy expert and economic analyst Milos Zdravkovic, who commented on the postponement of sanctions for Telegraf Biznis and explained what that means for Serbia.

According to him, the sanctions are unlikely to come into force at all.

"I have been saying for three months that there will be no sanctions. Oil companies do not go to war with each other - that has never been the practice. In addition, they have a great influence on the economy of their countries. The new (US) administration cannot stop them immediately, first they will delay them once, then a second time, then a third time... and in the end they will forget about them completely."

What is the real reason for sanctions?

One of the main reasons is to prevent the financing of the the war in Ukraine. However, Zdravkovic claims that this is not true:

"The Russians did not use NIS profits to finance the war, but invested that money, 3.2 billion euros, in the modernization of the company. Whether the goal was solely the development of the company or avoiding the payment of dividends, I cannot say, but the fact is that the money went towards improving production."

He added that Serbia is not that important in the global oil market:

"As much as 82% of oil is imported through JANAF (pipeline), and JANAF signed a record contract with the Russians for 10 million tons of oil over the next two years. Russia exports about 2 million barrels of oil every day, while India buys 2.1 million barrels. As important as we think we are in this story - we really aren't."

Sanctions will disappear

Zdravkovic stood by his position:

"There will be no sanctions. They'll just keep putting them off until the story disappears."

As for the changes in the ownership structure of NIS, he believes that is just a formality:

"Gazpromneft is a subsidiary of Gazprom, which is under sanctions. This change is made solely for the sake of Europe, but in essence - it does not change anything."

NIS yesterday published two notices on the website of the Belgrade Stock Exchange that show Gazprom Neft has reduced its ownership share from 50 to 44.84 percent, while Gazprom increased its share from 6,15 to 11,30 percent.

(Telegraf Biznis)